City Discusses Council Attorney Pact, 5-Year Financial Plan
November 5, 2019 at 3:47 a.m.
By David [email protected]
By the end of the meeting the full council couldn’t come to an agreement on the contract with Wabash attorney Doug Lehman. The council’s three-member task force on the contract will meet with city attorney Scott Reust and review the contract, rewriting it where necessary, as well as possible protocols as to when the council’s attorney can be used.
The contract will then be presented to the council at its Nov. 18 meeting for further council discussion.
Councilman Ron Shoemaker pushed for the contract to be presented to the Board of Public Works and Safety at its Nov. 15 meeting, but Councilman Jeff Grose – who sits on the Board of Works and has had reservations about the council having its own legal counsel since the start – brought up a number of issues with the contract.
Councilman Mike Klondaris wanted any councilman to be able to contact the council attorney without having to consult with other council members, but other councilmen suggested two council members should agree that the council attorney was needed and then let the council president know of their desire to consult the council attorney.
Under the contract, Lehman would be paid $220 per hour and that couldn’t exceed $12,000 per year.
Warsaw is a Class 3 city, based on population, and no other Class 3 city in the state has its own attorney separate from the city’s.
Earlier in the meeting, Jeff Rowe, of public accounting and consulting firm bakertilly, gave an approximate 40-minute presentation on the city’s comprehensive financial plan for 2017-21.
Council President Diane Quance said the plan was developed by a committee including city officials and bakertilly. “The purpose of the plan is a five-year document to help us make budget decisions, to help us make decisions for any expenditures that we have moving forward, to be able to look at what our account balances are and where we may need to shore those up or where we may have the option of moving money around,” she said.
Rowe said this is the first year the city has gone through the overall comprehensive plan for the city. He said it was borne out of cities throughout the state needing to be more proactive at looking ahead.
“As you can imagine, one of the largest pieces of this comprehensive plan is the capital piece. And the city, like many other municipalities around the state, has significant capital needs, infrastructure-replacement needs, needs that are driven through economic development and other things,” Rowe said, noting that the plan incorporates all of those capital improvement needs that were identified for the city.
“Really, what we’re attempting to do is take those future needs over the next three or five years and really try to align those with potential sources of revenue and, again, at the same time preserve financial accountability for the city,” Rowe continued.
He talked about the city’s historical trends and findings. In 2013 – a low point that occurred after the Great Recession in the country – the city’s property tax revenue collected was $9,404,644. In 2019, revenue is expected to be $12,329,498, or about a 31% increase, which Rowe attributed to growth in the city’s assessed valuation.
At the same time, the city’s revenue losses due to Circuit Breaker Credits went from $510,173 in 2013 to about $780,296 this year, about a 53% increase.
Rowe said in 2019, the property tax reductions due to the Circuit Breaker Credits in Kosciusko County totaled $1.929 million. The city represents 40.46% of those Circuit Breaker losses, with schools accounting for 32.82% and the county at 9.7%.
The city’s net assessed value went from $797 million in 2013 to $918 million in 2019, about a 15% increase. Meanwhile, the city’s certified tax rate went from $1.1381 per $100 of assessed value in 2013 to $1.2797 in 2019, about a 10% increase.
“So again, the city has been able to manage the tax rate, both by way of assessed value and in terms of controlled spending. But that tax rate has remained virtually the same, slightly higher, over that five- to six-year period,” Rowe said.
Another historical financial area that was examined was the city’s ending cash balances for select operating funds, such as the general fund, road funds and fire territory. In 2011, the total of the cash balances was $10,955,000, and rose to $13,289,000 in 2018. Rowe noted the low point was in 2015 when they totaled $9,733,000.
In terms of spending within those selected operating funds, Rowe said they were around $14-$15 million in 2011 and 2013. There’s since been an increase in spending to $18,916,000 in 2018.
Going forward, looking at 2019-21, Rowe said they’re expecting a cash reserve decrease by about $10 million. He attributed that primarily to capital spending.
“So the city has identified roughly about $32 million in capital needs. About $12.8 million of those capital needs are expected to come from some sort of external funding, so grants and other places, which leaves about $19-$20 million to be paid from funds on hand,” Rowe said.
Bakertilly offered about 11 alternatives to consider. He discussed six of those during the council meeting, including that the council should consider shifting property tax levy from fire and police pensions and cemetery to other controlled funds; undertake a review of all city fees; consider using a portion of CCD, EDIT or Riverboat funds to pay for capital projects; issuance of general obligation and/or lease rental bonds to fund capital projects; consider establishing a city trash fee; and undergo a citywide operational review.
Alternatives he didn’t discuss were utilizing TIF funds to complete a portion of capital plans that relate to TIF areas; continue to apply for grand funding; monitor budgeted disbursements in operating funds; actively pursue funding opportunities on outstanding bonds; and reduce or delay portions of the city’s capital plan.
Before taking questions, Rowe said, “The city continues to operate in a strong financial position. We’ve seen that historically, and we see that continuing over the next three years. Certainly it will take some, perhaps, changes and being creative in how certains costs – capital and other costs – are paid for. But, on the whole, I’m confident that ... the city is in a good financial position.”
Mayor Joe Thallemer was not at the council meeting due to a family emergency. His father’s obituary appears on page 3A of today’s edition.
By the end of the meeting the full council couldn’t come to an agreement on the contract with Wabash attorney Doug Lehman. The council’s three-member task force on the contract will meet with city attorney Scott Reust and review the contract, rewriting it where necessary, as well as possible protocols as to when the council’s attorney can be used.
The contract will then be presented to the council at its Nov. 18 meeting for further council discussion.
Councilman Ron Shoemaker pushed for the contract to be presented to the Board of Public Works and Safety at its Nov. 15 meeting, but Councilman Jeff Grose – who sits on the Board of Works and has had reservations about the council having its own legal counsel since the start – brought up a number of issues with the contract.
Councilman Mike Klondaris wanted any councilman to be able to contact the council attorney without having to consult with other council members, but other councilmen suggested two council members should agree that the council attorney was needed and then let the council president know of their desire to consult the council attorney.
Under the contract, Lehman would be paid $220 per hour and that couldn’t exceed $12,000 per year.
Warsaw is a Class 3 city, based on population, and no other Class 3 city in the state has its own attorney separate from the city’s.
Earlier in the meeting, Jeff Rowe, of public accounting and consulting firm bakertilly, gave an approximate 40-minute presentation on the city’s comprehensive financial plan for 2017-21.
Council President Diane Quance said the plan was developed by a committee including city officials and bakertilly. “The purpose of the plan is a five-year document to help us make budget decisions, to help us make decisions for any expenditures that we have moving forward, to be able to look at what our account balances are and where we may need to shore those up or where we may have the option of moving money around,” she said.
Rowe said this is the first year the city has gone through the overall comprehensive plan for the city. He said it was borne out of cities throughout the state needing to be more proactive at looking ahead.
“As you can imagine, one of the largest pieces of this comprehensive plan is the capital piece. And the city, like many other municipalities around the state, has significant capital needs, infrastructure-replacement needs, needs that are driven through economic development and other things,” Rowe said, noting that the plan incorporates all of those capital improvement needs that were identified for the city.
“Really, what we’re attempting to do is take those future needs over the next three or five years and really try to align those with potential sources of revenue and, again, at the same time preserve financial accountability for the city,” Rowe continued.
He talked about the city’s historical trends and findings. In 2013 – a low point that occurred after the Great Recession in the country – the city’s property tax revenue collected was $9,404,644. In 2019, revenue is expected to be $12,329,498, or about a 31% increase, which Rowe attributed to growth in the city’s assessed valuation.
At the same time, the city’s revenue losses due to Circuit Breaker Credits went from $510,173 in 2013 to about $780,296 this year, about a 53% increase.
Rowe said in 2019, the property tax reductions due to the Circuit Breaker Credits in Kosciusko County totaled $1.929 million. The city represents 40.46% of those Circuit Breaker losses, with schools accounting for 32.82% and the county at 9.7%.
The city’s net assessed value went from $797 million in 2013 to $918 million in 2019, about a 15% increase. Meanwhile, the city’s certified tax rate went from $1.1381 per $100 of assessed value in 2013 to $1.2797 in 2019, about a 10% increase.
“So again, the city has been able to manage the tax rate, both by way of assessed value and in terms of controlled spending. But that tax rate has remained virtually the same, slightly higher, over that five- to six-year period,” Rowe said.
Another historical financial area that was examined was the city’s ending cash balances for select operating funds, such as the general fund, road funds and fire territory. In 2011, the total of the cash balances was $10,955,000, and rose to $13,289,000 in 2018. Rowe noted the low point was in 2015 when they totaled $9,733,000.
In terms of spending within those selected operating funds, Rowe said they were around $14-$15 million in 2011 and 2013. There’s since been an increase in spending to $18,916,000 in 2018.
Going forward, looking at 2019-21, Rowe said they’re expecting a cash reserve decrease by about $10 million. He attributed that primarily to capital spending.
“So the city has identified roughly about $32 million in capital needs. About $12.8 million of those capital needs are expected to come from some sort of external funding, so grants and other places, which leaves about $19-$20 million to be paid from funds on hand,” Rowe said.
Bakertilly offered about 11 alternatives to consider. He discussed six of those during the council meeting, including that the council should consider shifting property tax levy from fire and police pensions and cemetery to other controlled funds; undertake a review of all city fees; consider using a portion of CCD, EDIT or Riverboat funds to pay for capital projects; issuance of general obligation and/or lease rental bonds to fund capital projects; consider establishing a city trash fee; and undergo a citywide operational review.
Alternatives he didn’t discuss were utilizing TIF funds to complete a portion of capital plans that relate to TIF areas; continue to apply for grand funding; monitor budgeted disbursements in operating funds; actively pursue funding opportunities on outstanding bonds; and reduce or delay portions of the city’s capital plan.
Before taking questions, Rowe said, “The city continues to operate in a strong financial position. We’ve seen that historically, and we see that continuing over the next three years. Certainly it will take some, perhaps, changes and being creative in how certains costs – capital and other costs – are paid for. But, on the whole, I’m confident that ... the city is in a good financial position.”
Mayor Joe Thallemer was not at the council meeting due to a family emergency. His father’s obituary appears on page 3A of today’s edition.
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